Short run core equivalence in an overlapping generations model

1987 ◽  
Vol 43 (1) ◽  
pp. 170-183 ◽  
Author(s):  
Suchan Chae
Keyword(s):  
Overlapping Generations ◽  
Overlapping Generations Model ◽  
Short Run ◽  
Core Equivalence

scholarly journals THE BURDEN OF UNANTICIPATED INFLATION: ANALYSIS OF AN OVERLAPPING-GENERATIONS MODEL WITH PROGRESSIVE INCOME TAXATION AND STAGGERED PRICES

2011 ◽  
Vol 16 (2) ◽  
pp. 278-308 ◽  
Author(s):  
Burkhard Heer ◽  
Alfred Maußner
Keyword(s):  
Overlapping Generations ◽  
Price Model ◽  
Overlapping Generations Model ◽  
Lump Sum ◽  
Short Run ◽  
The Business Cycle ◽  
Redistributive Effects ◽  
Progressive Income Taxation ◽  
Unanticipated Inflation

Inflation is often associated with a loss for the poor in the medium and long term. We study the short-run redistributive effects of unanticipated inflation in a dynamic optimizing sticky price model of the business cycle. Agents are heterogeneous with regard to their age and their productivity. We emphasize three channels of the effect of inflation on income distribution: (1) factor prices, (2) “bracket creep,” and (3) sticky pensions. Unanticipated inflation that is caused by monetary expansion is found to reduce income inequality. In particular, an increase of the money growth rate by one standard deviation results in a 1% drop of the Gini coefficient of disposable income if extra tax revenues are transferred lump-sum to the households.

scholarly journals INCOME INEQUALITY, MOBILITY, AND THE WELFARE STATE: A POLITICAL ECONOMY MODEL

2012 ◽  
Vol 17 (6) ◽  
pp. 1198-1226 ◽  
Author(s):  
Luca Bossi ◽  
Gulcin Gumus
Keyword(s):  
Income Inequality ◽  
Welfare State ◽  
Social Insurance ◽  
Overlapping Generations ◽  
Tax Rates ◽  
Overlapping Generations Model ◽  
Public Programs ◽  
Transfer Payments ◽  
Set Up ◽  
The Welfare State

In this paper, we set up a three-period stochastic overlapping-generations model to analyze the implications of income inequality and mobility for demand for redistribution and social insurance. We model the size of two different public programs under the welfare state. We investigate bidimensional voting on the tax rates that determine the allocation of government revenues among transfer payments and old-age pensions. We show that the coalitions formed, the resulting political equilibria, and the demand for redistribution crucially depend on the level of income inequality and mobility.

scholarly journals Endogenous Agency Problems and the Dynamics of Rents

2020 ◽  
Vol 87 (6) ◽  
pp. 2542-2567
Author(s):  
B Biais ◽  
A Landier
Keyword(s):  
Overlapping Generations ◽  
Agency Problems ◽  
Overlapping Generations Model ◽  
Complex Tasks ◽  
Complex Skills ◽  
Do So

Abstract While potentially more productive, more complex tasks generate larger agency rents. Agents therefore prefer to acquire complex skills, to earn large rents. In our overlapping generations model, their ability to do so is kept in check by competition with predecessors. Old agents, however, are imperfect substitutes for young ones, because the latter are easier to incentivize, thanks to longer horizons. This reduces competition between generations, enabling young managers to go for larger complexity than their predecessors. Consequently, equilibrium complexity and rents gradually increase beyond what is optimal for the principal and for society.

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